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Governor Parnell Signs Renewable Energy, Geothermal Legislation

June 2, 2010, Anchorage, Alaska – In an effort to make geothermal power projects economically viable and to produce more affordable and reliable electric power for homes and businesses, Governor Sean Parnell signed Senate Bill 243 today.

SB 243, sponsored by Senator Lesil McGuire, encourages safe exploration for and development of Alaska’s enormous geothermal energy. The bill moves jurisdiction over the permitting and inspection of geothermal wells and operations from the Department of Natural Resources to the Alaska Oil and Gas Conservation Commission. Representative Charisse Millett was instrumental in the passage of the legislation.

SB 243 also reduces the royalty derived from geothermal leases on state land. The royalty rate has been 10 to 15 percent of the gross revenue. SB 243 drops the rate to 1.75 percent of the gross revenue during the first 10 years of income-generating production on state-leased lands, with a 3.5 percent royalty rate thereafter.

“This legislation makes geothermal power projects economically viable and therefore more likely to produce more affordable and reliable electric power for homes and businesses,” Governor Parnell said. “This bill assists companies seeking to build a commercial grade geothermal plant in Alaska by reducing the royalty payment.”

Governor Parnell also signed Senate Bill 277. SB 277, sponsored by the Senate Energy Committee, exempts from regulation facilities that generate electricity entirely from renewable energy resources when that electricity is sold to regulated utilities.  


This legislation relates to the Fire Island Wind Project being developed by CIRI. The project is expected to include 36 turbines capable of producing 54 megawatts of electricity, enough to power more than 18,000 homes.

“Alaska is unique in that we regulate wholesale power production in addition to regulating the utilities that serve the public,” Governor Parnell said. “This legislation incentivizes private-sector investment in Railbelt electric generation and transmission infrastructure.”

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